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TRENDS IN BEVERAGES

This allows them to respond much quicker than franchises and large chains. Not only that, but single store owners tend to focus on customers out of necessity. They don’t have other stores to offset losses so they must capitalize on every available opportunity. The first opportunity actually presented itself last year when Millennia’s became the largest generation in terms of population. The statistics are actually quite staggering. According to Oracle, they’re the largest generation in world history, 77% visit a restaurant at least once a week, and their direct annual spending is $1.3 trillion in the U.S. alone. Their unique buying habits are driving some markets and destroying others. Craft brewers and wineries are currently capitalizing on their desire for individuality and it’s time coffee shops do the same. This generation has huge buying power that is growing each and every year. They have rather unique expectations so it’s extremely important to find out what they want from their local coffee shop. Think about this… the Baby Boomer population (born between 1946 and 1964) peaked at 78.8 million and is currently at 74.9 million, but will dwindle to only 16.6 million by the year 2050. In a relatively short amount of time, coffee shops will need to focus their marketing efforts on the future buying power of Millennialism. The second opportunity is a gift from the world of franchising. I can tell you from firsthand experience that franchising is a broken model. The misalignment of goals within the organization is the main reason. Let me explain. Corporate gets paid on the top line (total sales) while the franchisee gets paid on the bottom line (net profit). Corporate gets paid no matter what...they collect their $30,000 franchise fee and ongoing royalties, while the franchisee gets stuck with all the risk. Corporate has one agenda and the franchisee has a second agenda.

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Not only that, but many times the regional advertising co-ops have a third agenda. Amidst all this internal conflict, franchises are losing focus on what their customers expect. Not

Not only that, but it allows for ongoing market research so coffee shops can track the results of any changes they decide to make. This will allow them to make decisions based on reliable data about what their customers truly only that, but because of all the red desire. tape, they’re evolving way too slowly. Many of them have failed to respond I always have been and always will be to any of the recent new trends in intolerable of bad customer service. I coffee as defined by the current Third fell in love with coffee shops because Wave movement. It started as a ripple I found them to be a “happy place”... in 2002 and has been growing ever an oasis of peace in this crazy world. since. The more research I do, the more I realize how out of tune coffee shops The third opportunity is...you guessed have become with their customers. it: Third Wave coffee shops are Soon, this coffee bubble will burst. booming. Coffee drinkers are now Independent coffee shop owners, becoming interested in all of its dif- shareholders, and franchises will be ferent processes; from the origin of stuck scratching their heads. Then, the harvested bean to the roasting and as they always do, market research brewing processes. Beans are sourced companies will pick up the pieces and from farms instead of countries and explain how this bubble could have lighter roasts are preferred so the been prevented. Finally, once the dust unique characteristics of each bean settles, the specialty coffee industry aren’t burned away. One added bonus will take an appropriate turn. is that light roast coffee has more caffeine than dark roast coffee (if you Five years from today, specialty coffee measure your coffee using a scoop). shops will be vastly different. No This movement also includes revivals longer will the coffee industry tell us of alternative brewing methods such what we’re going to drink based on as cold drip, cold brew, AeroPress, their convenience, profitability, and pour-over, and many more. Keeping stumbled-upon inventions. up with trends by listening to customers through market research is crucial. As coffee consumers, we must demand Right now, independent coffee shops that we are heard. Start by asking have an opportunity to grab massive your barista for a customer satisfacmarket share because franchises will tion survey. And when they refuse, let be too slow to respond. Today, cus- your dollars do the talking by spendtomers prefer the uniqueness of craft ing them at a coffee shop who listens beverages…craft beer, wine, and now to their customers. As coffee lovers, hand-crafted coffee! we will begin shaping the coffee shop of the future one purchase at a time. The final opportunity lies in the recent trend of subscription business models. As consumers, we subscribe to magazines, Netflix, software (like Microsoft Office 365), and even clothing through places like Rent the Runway. Market research companies will be next to jump onboard. Instead of charging $3,500 for a one-time study, market research companies will be offering their services via subscription. This brings the price low enough to make it cost-effective for coffee shops. w w w. f o o d b e v m a g . c o m | J a n u a r y 2 0 1 7


Food & Beverage Magazine January 2017